Statoil, Teekay Shipping and Leif Hoegh & Co have set up a new company, Compressed Energy Technology AS (CETech), to commercialize new systems for the transportation of compressed natural gas--CNG.

Market studies show that CNG ships can solve transportation needs in cases where the size and geographical location of oil and gas fields means transportation is not commercially viable if based on conventional pipeline or LNG solutions (Liquefied Natural Gas).

Cooperation with DNV

CETech is the result of a two-year joint research and development project with the research department of DNV.

DNV has also played an active part in verification and quality assurance of the technology. The project has generated a number of technological systems for which patents have been applied. The three companies have equal participating interests in the new company.

Alf-Petter Olsen has been appointed General Manager of CETech. He has been part of the project management team since its inauguration in 2002 and has extensive maritime experience from shipping company operation, ship-broking, yard management and consultancy.

Economic, environmentally and resource friendly

The transportation of compressed natural gas in specially-constructed CNG ships enables gas to be loaded on the field and transported to market without investment in pipelines or LNG plants. Simplified terminals and reduced energy loss through compression rather than by cooling to LNG also mean considerable gains. Associated gas from the oil fields can now be commercially exploited instead of being flared off on the field or injected back into the reservoir. This may be a solution for many fields at a time when new international and environmentally-motivated rules are being drawn up for limiting burn-off.

The market potential for CNG is expected to be profitable within a transport range of 300 to 2000 nautical miles with production volumes in the range of 0.5 to 3 billion cubic meters a year.

Hoegh LNG

Leif Hoegh & Co has decided to pursue the development and commercialization of new concepts within LNG and natural gas sea-borne transportation and the participation in CETech is a natural consequence of this decision," notes Stephan Tschudi-Madsen, President of Hšegh LNG, in a comment to the establishment of the company.

Hoegh LNG, the LNG (Liquefied Natural Gas) division of Leif Hšegh & Co., has established a new section called "Floating Midstream Solutions" (FMS) responsible for developing and pursuing contracts for new marine transportation and terminal concepts for natural gas.

FMS' project development includes LNG solutions in addition to CNG, such as a Floating Storage and Regasification Unit (FSRU) and Hoegh LNG's proprietary system, the "LNG Shuttle and Regasification Vessel" (SRVTM).

The SRV is a modified LNG tanker. The vessel's cargo of LNG is vaporized offshore and sent to shore as natural gas via a subsea pipeline. The SRV will hook up to a mooring and unloading buoy, discharge its cargo, then go back to pick up a new cargo. A two-buoy system will ensure continuous delivery of natural gas. The buoy system is similar to those used in the North Sea by oil shuttle tankers